Episode Transcript
[00:00:00] Speaker A: Hello and welcome to another episode of the Mic'd Up Show. This is the ultimate hub where the hidden stories behind the mortgage industry come to life. I'm Mike Rather. Mike is on vacation with family, a big event in his life. We'll let him talk about when he returns. But as you all know, in every episode, we dive deep into the entrepreneurial spirit, the strategic insights and the breakthrough innovations that build the world's greatest mortgage companies.
So whether you're advancing your career or scouting for industry leaders or exploring opportunities in mortgage fintech prop tech, you're in the right place. Get ready. Unlock the story behind every mortgage. Let's dive in today with someone who has helped many families have great stories about obtaining their first home or their vacation home or just getting into a better place. It's Max Lehman, CEO, founder of Loan People.
And he is going to talk today about how he did not just go from originator to CEO by abandoning that loan officer mindset. He still practices today, still continues to have the volume that allowed him to go out there and generate the business that you need to generate to make the jump from loan officer. And what's fantastic about this episode is Max built an imb and many people go from broker and then use some hybrid approaches to eventually go into the IMB route. And I think from that point it's a pretty similar route. But to just jump right in from loan officer to IMB is going to be a fantastic story for any loan officer processor out there who has ambitions. Doesn't mean you have to get up and do it tomorrow, but you can start to think about the process as you do it.
So, you know, welcome to the show. Max, I appreciate you coming on.
Before you were CEO of Lone People, you were a top producer.
You were taught by units, I think in the country at one point.
Just can you tell us how you're able to build a book of business where it wasn't just one year flash, it was multiple years.
It was units over volume.
And even geographically like did that, it sounds like that matters too. You believe in being present in the, in the markets that you work in.
Take us back to that. Whether how you got into the industry or just once you were in the industry, once you hit that moment of you had a system or you had the ability to actually predict, which I think a lot of people have trouble in this industry, kind of have an idea of what kind of volume you would have before the year ended.
[00:02:47] Speaker B: Well, first of all, Michael, thanks for having me. Pleasure to be here. I really appreciate you Reaching out and having me on. So thank you very much.
Appreciate everything you do for the industry.
You know, you're one of the good guys, and we certainly need more of you, so thank you for all of that.
[00:03:07] Speaker C: Yeah.
[00:03:07] Speaker B: You know, actually, it's funny. What's. Today's. July 9th. Today is actually my 25th anniversary of being a loan officer.
I started July 9th, 2001.
So you caught me on a good
[00:03:20] Speaker A: day, just like the country, right? A big birthday. You. You have a big.
[00:03:24] Speaker B: Exactly, exactly. Although I don't think we're going to have any UFC fights outside of my office or flyovers.
Although, you know, the struggle between borrowers and loan officers, there might be some grappling going on, but. Yeah, you know, I got in, didn't. Didn't know what a mortgage was.
I was 20 years old, was told you could make a lot of money. It sounded good. I figured I'd give it a try. I had nothing to lose.
For me, very, very quickly, it just clicked with me, understanding guidelines. I actually would read all the MRI books, which are really, really boring.
But I needed to understand, like, what does this mean? What am I doing?
And very quickly, I was just kind of able to always put the pieces of the puzzle together.
Probably within six to 12 months, I had veteran loan officers coming to me asking, hey, what of this? Or how would you put this together?
That kind of thing.
And so it just clicked.
You know, we were trugging along. In 2007, I met a gal. I'm married to her now, but in between that time, she actually started doing a little bit of marketing for me.
In 2008, she really started doing that. From 2008 to 2009, we went from 19 million to 39 million. With the help of her marketing. We decided that. We decided we were getting married.
Not because of that. We loved each other, but it helped.
And then she quit her job and came and started doing this full time. So really, 2009, 2010 is when we really started building out Lehman team production
[00:05:02] Speaker A: while planning a wedding. That's.
[00:05:04] Speaker B: Well, we doubled it and then we planned a wedding.
But, you know, like, we were very. We were one of the. She had the foresight, honestly, with reviews, and she was one of the very first people to figure out reviews use, and that. That helped. I am, I believe, humble brag. I. I am one of the best technicians in this business. I can. I can take. If there is a way to get a loan done, I will find it.
I get a lot of business because I'm able to figure out ways of getting loans done that other people can.
So we took. You took her marketing brain and my technical brain and sales ability and that's really what exploded it. And I was co managing a branch at the time and I started, I had too many leads. I couldn't get back to them all. And so I brought over one loan officer to help and then I brought over another loan officer and you know, 2010, I was a, I was number one in Austin. And that's really when Lehman Team started.
Fast forward to 2015.
We were number one. Max Lehman, the loan officer was number one in the, in the nation for units in Scotsman guide. We did 1200 that year, which is actually like, that was actually my most proud moment. The volume is great, but units are actually what matter to me. Yeah.
And so that, that was really, really cool.
But you know, I've got a great, great team behind me. You know, it's, it's, it's not just me. There's been multiple different loan officers on the team, but the core of the loan officers on my team now, Jory, Amanda, Misty have been with me for.
Well, I've known all of them since the beginning of my career.
We've got a great processing team set up. So it all, it all just kind of comes together.
And you know, by 2017, we were doing 300 million a year.
Pre Covid, you know, about a thousand units a year on average. Bad year was 800.
And you know, through that journey, transparency was always important to me. I was, I was at a company for 14 years that, that did a lot of, a lot of great things. But you know, some companies change what's, what's happening and some things changed and we needed to start kind of figuring out what was the next play for us. We took a pit stop at another company. And that's really when I decided I, I needed to just do this on my own. You know, Lehman team was the fourth largest company in Austin.
I was the number one loan officer in the state by volume, top 10 in Scotsman guide.
And you know, so really decided we can do this, we can do this for ourselves.
The re. I did look at starting out as broker, but I'm a control freak. And when you're doing 50, 70, 80, 100 units a month, I personally find it hard to be a broker in that situation. Like, for me, I needed things more streamlined. And that became very apparent very quickly. So we needed to build out an IMB before, before we could open our doors. And so we spent all of 2019 setting up this IMB and then we opened our doors. January 2020.
[00:08:22] Speaker A: Wow, that's good timing.
[00:08:25] Speaker B: Yeah.
For two years I was a genius.
[00:08:30] Speaker A: A question came to mind while you were, you were talking, so I'll interject it here.
Bill Walsh has a book called the Score takes care of Itself. So in mortgage terms that would be. If you master a file, the reputation of being able to do that takes care of itself. Sounds like that's definitely what's occurred with the people in your ethos and that's why people refer you business very relevant today.
Where do you.
Everybody is either just dragging those guidelines you talked about into a cloud code or a GPT or maybe it's a Max Lehman who says that's not good enough. If I could recreate my own brain though and Claude code it, boy that would be what consumers could go to and get the answer.
Do you think the output there will never be.
Do you think there are ideas that you have as you're talking to somebody that Claude would not pick up on? And I'm talking like a Claude that talks to this person every day and helps them with their stub toe that kind of knows them but.
[00:09:34] Speaker B: Yep.
[00:09:35] Speaker A: Do you think that is a false summit?
[00:09:38] Speaker B: That is a very interesting question.
I've not been asked that question before.
I think when this business, yes, everybody's going to the Internet first and they're using Claude for everything and, and all of that. But when you have somebody that is making, that is getting a loan, they're ultimately going to have to deal with human beings.
Now you have a sect of people out there that don't want to talk to any humans and, and that's perfectly fine. But the majority of people are making big life decisions and want to have input and need help and need hand holding and need to understand. So I had a gentleman in my office actually last week who had his clawed up in his iPad telling him what questions to ask me and what we should be talking about and all of that. And it was really interesting because I was giving him options and saying well we could do this or this. But I recommend. And he goes yeah, that's what Claude says too.
I was like great. I know, you know, I know what I'm doing. But I think like when I'm talking to a customer, especially one that's been having a problem qualifying or not sure what they're doing and we're having dialogue and I'm looking at their paperwork, they can see my wheels turning and I start popping out ideas, you know, and just Kind of word vomit all over the place. And for me that's, that's how I get creative with trying to, oh wait, but what about this? Or what about that? Or tell me this. And I think that, I think that AI and computers in general, you don't get that with them. Right. So they can actually see me working and thinking and caring about what they need and what they're looking for.
[00:11:15] Speaker A: Yeah, I think this industry for my mobile app days, I think it's plagued with the people that build the products or the ideas know too much about mortgage and they're building it for people that know nothing about mortgages.
And so there's this assumption how the end user is going to think like a loan officer, but they, they don't, they don't know anything about loans. So they are scared is what I'm getting at.
There is those personality pieces that AI, AI doesn't have empathy. Right.
And even the people building it probably don't have empathy because they're not scared of buying the home. They've been drenched in this thing forever. They know it's binomial. Like either get approved or you don't, or you get a don't get approved, then you try non qm. If you don't get non qm, then you don't get it alone. But these people aren't thinking in the terms of mortgage. Your, your clients just want a home. Do you have any stories that kind of share that human aspect of what you do every day?
[00:12:18] Speaker B: You know, I talked to a gentleman yesterday actually and the conversation ended with me telling him he should not get a loan right now.
He went to another lender, they said he was approved, he really wasn't. They blamed it on the condo. But after I got the file, like it wasn't the condo, it was the file. So we went through everything and I told him exactly what needed to happen and that he could be approved to buy a home in three months. I had to set up a payment plan with the irs. There was a couple of things, but then I told him at the end of this, you have no money.
Like all the money that you have in the bank, you're going to spend that to buy this house. And that's a mistake. You shouldn't do that. Well, but I'm going to make more money. I just made self employed. I just made $6,000 yesterday. Great, but you didn't make $6,000 because you're going to pay taxes on that money as well.
So why don't we stop, come up with a savings plan. And let's revisit this in six months, do all of these things that we talked about, and then let's see where you are in six months and go from there. You know, so things like that. The other thing that I was going to say, one of the things that I'm. I preach to all of my loan officers and then I do to myself is I want everybody in the world to know what I do. I wear lone people hats and lone people shirts everywhere I go. It's all over my social media.
You know, if you go to my gym, half the people in there, I give them all free stuff so they're all wearing it. And like, I want it out there. When I get my haircut, I talk about it. And that always generates com. Oh, you do loans?
Well, I'm trying to get one and I'm having this problem or, oh, my buddy was just telling me about something. Maybe I could have him call you. And keeping that in the ethos, not only, like, do I get referred and we can have conversation, but I know everything right off the top of my head and I can start spitting stuff out. I don't have to go to a computer and say, well, let me get back to you.
[00:14:10] Speaker A: Yeah, Everything that. I was watching some podcasts of you and you talk about a comfortable payment, and I thought that was great branding, where you talk about not the payment they can get qualified for, but the payment they can get comfortable behind. I know John Wooden defined success around knowing you made the effort to become the best you're capable of becoming. And that is around the journey, not just doing the next loan that's available, but actually showing that you're putting in the time and effort into your craft. And that story you just shared, the effort to purposely not put somebody in a bad loan, I think unlocks the. The reputation you have around that branding of. You really do search for comfortable payments. Did you.
Is that your wife's idea? That your idea? Like, where'd you come up with the word comfortable payment? Because I think that's great branding.
[00:15:11] Speaker B: You know, when me and my wife were buying our first house, I'd already owned a home and we're buying a new one. And I, like, I was very scared because at the time, you know, 2009 or 2008, at the time, I was going from a house that I bought 10 years earlier for 120,000 to now this one was going to be 350,000 and my payment was going to go from 1200 to 3500. And I kept saying, I don't know if I'm comfortable with this. I have a lot of anxiety about it. And for me that's kind of where it started is like I qualified for, well, more than that. But I wasn't comfortable. And this was like the upper end of my comfort level.
And everybody always asks, well I need to know what I qualify for. And I always counter that with no, you don't like I'll tell you. But we need to start with where are you comfortable? Because you might qualify for a million dollars, but if you're not comfortable paying more than $4,000 a month, you're not getting a million dollar house. So let's start with where do we want our payment? What is the most you're comfortable with and what is the most amount of money you're comfortable parting with?
And let's go backwards.
And that's really just how I've, I've structured it for the last, you know, 15, 18 years.
That's funny. Nobody's ever asked me how I came up with that. That was actually, yeah, you know, I,
[00:16:26] Speaker A: I, my company has adopt the brand. So I do think branding but what I actually do at best is I feel I'm able to see a mortgage company above the trees, above the forest. It just happens to be with me being a combination of an entrepreneur and you know, a sales or tactical person. I think one thing that I do see, and I'm a big NBA fan, had season tickets to the Celtics for a while. We just parted ways with Jalen Brown.
And that doesn't make sense on the court. Right. That is a game around future new CBA rules around first apron, second apron ability to try to outsmart the other GMs. If we can do a balance sheet P L better than them. And where it comes into like where I think about it in mortgage is I believe mortgage companies need call centers in the future.
But I also. So that would be like the GM and me. But then on the court I don't think us getting rid of Jaylen Brown was smart at all. Right. Like I'm gonna, you players have to play on the ground. Forget analytics. And that's the distributed retail, that's the empathy that's in the community. I kind of think you need both at some point. One to keep alive and one to thrive, let's say. But with that I'm the first to admit, I think and it's probably hard for an owner to represent both because then you don't really have a story behind what you're doing. But what do you see as loan officers in the field?
What do they get that the call center loan officers just won't get by nature of how they're paid to do it and not being in front of somebody.
[00:18:14] Speaker B: So a couple of things. Number one, I think call center loan officers, there's certainly a place for them in this, in this industry.
A lot of loan officers, that's how they start and that's how they cut their teeth and that's how they learn.
What I would say is to be, to be a self sourced loan officer is one of the only jobs in this country where the income limit is, the income potential is limitless. And if you're able there, there really is, you know, you have these sales jobs and they have caps and they have quotas and all of that. But the more business you can generate, the more money you can make. But you have to be able to generate the business.
And if you're in a call center, that's great. You're getting handed leads, but you're certainly those leads have to be paid for. There are systems that have to be paid for to continue all the follow up. It's a whole different process, right.
Having that human to human connection, being able to get one client to refer you to two more clients and a realtor to refer you to three more Realtors. And all of those things like that is where you see massive growth potential.
[00:19:23] Speaker A: So final question before our break here and then we'll get into how you went from producer to platform builder that you are today. How do we recreate Max? And we already have stories where
[00:19:37] Speaker D: loan
[00:19:37] Speaker A: officers that follow your system produce more.
But can you just, and this is kind of a selfish question of mine, but as you, as we were talking, can you give an overall view of the real estate referral ecosystem these days with the listings now kind of changing where they're going and the consolidation in real estate where there's less names, is it, is it any different than it was when I originated in 2012 or like, or where you see it going? Just what's, what's your pulse right now on real estate to loan officer referral ecosystem?
[00:20:21] Speaker B: So you know, there's a lot now with Compass taking over the world and buying everybody and now a lot of these companies have relationships with big, big lenders and they have their joint ventures and when that first started, loan officers, everyone you talk to, we're not going to get as much business because now Compass has a preferred in house lender that they have to use because of profit sharing.
Like Keller Williams did it for a long time where their agents would get a piece of the profit sharing.
This is none of that matters.
This is a relationship business as you have to continue to be the expert, you have to go, you have to continue to provide value. But that real estate agent, the good real estate agents want to send you, they want to send you business because they know that you're going to make them look good. And they know that if they send you somebody and you tell them they're good to go, they're good to go. And if they're going to have problems, they don't want to waste their time. And so it, people want to do business with their friends. I would say that I have 10,000 friends in this city and across this country because we just all, we, we all like each other. We do business together and it works well. Like people want to work with their friends. So the, the, those other kind of JV relationships, they can hinder some people. But you know, if you're really building those relationships, it's not a big deal.
[00:21:54] Speaker A: That's, that's great to hear because it's, it sounds like things are getting a little more wall garden than they should be. But friends win out, right? People want to do business with people they like and JVs are crazy. We could talk about that another day.
You know, even talk to a lender the other day who was complaining about the, the real estate jv and then I asked who they use for title and they're like, I have a jv. It's like, oh geez, that, that's kind of throwing some stones in a glass house there.
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[00:26:00] Speaker A: All right, we're back with Max Lehman, CEO Founder of Lone People, a former top producer in the country able to run build his own platform. And that's what we're going to dive into right now.
The Michael Garber's E myth talks about how people go from the shift of working in the business to working on the business.
And for you, just starting with I guess the back of the house, we'll work our way to sales because you're obviously really that's the easiest thing to understand as people are coming over to work with you. But what was it like working on files that are not your and I know you said you had a team sort of, but that came nothing to do with you.
How were you able to give it the same treatment and build it the same way as you treated your own files?
[00:26:52] Speaker B: Well, so that's a, that's a really good question. You know, when we're building out the company, the whole idea was to build a platform for loan officers to come and grow their business.
So it starts with, it started with what do I need? You know, so we'll get to sales like you said. But on the back end, what happens as a loan officer at a company, you put a loan into underwriting and now all of a sudden it's in corporate's hands. So how do you have underwriting work effectively and efficiently and look through that and what, what was things that I had at other companies that I wanted. What are things that other companies that I had that I didn'.
And so we started with the process there. Closing, funding, what I had no idea about what I was getting into. You know, you start talking about the back end of stuff with post closing, shipping, servicing, first payments, secondary, you know, and that was a lot of it was learn on the fly. And I had people in my corner that had done it before. You know, I've got people in my corner that have been doing it 40 years, you know, shout out TMC. I'm a big advocate of the Mortgage Collaborative and there's a lot of people in the there that have helped me on my journey.
But yeah, I mean it was, it was kind of building that stuff out as we went along.
You know, we didn't start growing and adding loan officers until we'd been open for about 18 months.
[00:28:18] Speaker A: Yeah, I think one of the places I think people don't quite understand about the broker versus jumping into the IMB is it's just a really lax environment, regulatorily speaking right now. But imbs have to play for the 7 year look back or look forward, so they sort of play under a different cost. But you are definitely working with a much higher bar of compliance when you first start the company. And this is kind of like we just talked about earlier in the show.
A loan officer telling somebody about a mortgage and somebody that's never done it before is going in more scared than they need to be of the unknown. I would assume it's the same as the, in the IMB world, you're very scared of compliance. So you're searching around, like you said at TMC and other places for like, what's the right answer. Don't set me up to get in trouble or don't set me up to, you know, all of a sudden, well,
[00:29:21] Speaker B: don't let me set my. Don't let me, don't let me set myself up for failure.
[00:29:24] Speaker E: Yeah.
[00:29:27] Speaker G: Know.
[00:29:27] Speaker A: Yeah. Like a random state rule and you know, I was doing the right thing. I onboarded how.
What's that journey like how, how long does that take till you get comfortable that you have all.
[00:29:40] Speaker B: Well it's funny because you don't know what you don't know. So it's not like you're walking around nervous about like what's going to happen with compliance. I mean we were always worried about marketing compliance and trigger terms and things like that because that's what we knew on the front end. And you know, like there's just a lot of times where like an attorney or a compliance person would be like you can't do that or why can't I do that? But I've been doing it this way. Well because it's not compliant and this is why. So it was a lot of like learning as we went. Oh yeah, no that, that's bad. Don't do that.
Fortunately, you know, and to my wife's credit, she's really good especially with marketing compliance and she's our CMO and just a marketing genius. But she like, she's definitely a nervous Nelly when it comes to that. So she like, she really took the brains as far as like being one of the experts. What can you expense? How can you do this? What is the state going to say? Those kind of things.
But yeah, I mean a lot of it's you, you don't know what you don't know. So you ask people and you learn and you adapt where you need to.
[00:30:46] Speaker A: Yeah. And so built, I mean that's part like this part. I don't know. I do know marketing wise every lender all of a sudden is in a huge piece where they put the P L recruiting on, on LinkedIn. Like that's the new thing. I would assume it works in your favor because you have less middle people. You've kind of built this flat org chart which is going to equal better rates for them or a better P and L to do other things with I suppose is compliance in like what, what is a. I guess what do you see in a P L? And then when a loan officer goes, are they actually going through the whole P L with you or do they just have three lines they're asking about as they're dropping around where they want?
[00:31:31] Speaker B: Our, our P Ls are very detailed. You know from a branch perspective when you're looking at the P at the branch P and L, I mean you're you're seeing all the cost of a loan, right? This $25 verification, the, the POS that we use is $50 a closed loan. Like you see all of those things, we're very, very detailed so that you understand exactly what it's costing. A lot of companies don't do it that way. A lot of companies, to your point, they'll show you three lines. Here's what you made, here's what you spend, here's, here's the net and we're covering all the other costs with our corporate allocation. But you don't really know what the corporate allocation is because we're saying like maybe it's some basis points and a profile but you can't see the back end pricing. So you like, you don't know. Right. And what I always wanted as a loan officer was just I know what I'm bringing in and I know what my net is.
Just show me what I'm paying for. Tell me like you're not doing, you're not, you're not a non profit. You're clearly doing this to make money. That's why we're all here.
Show me what you're making off of me. Show me where the money is going. And so like for, for us, we're pretty detailed because we want to show that stuff.
[00:32:47] Speaker A: What's your stance?
I'm trying to think of how I can ask this in case you don't want to answer it, but what we can edit anything. Oh yeah, that is true. What's your stance on secondary items like with repercussions.
So like gain on sale, like loan officers want transparency and part of that, but if you don't actually perform the flow and you were to be negatively hit, they don't want to get negatively hit. And so.
[00:33:16] Speaker B: Yep.
[00:33:17] Speaker A: Is there a maybe by the way, is there a trend where people are asking for those different secondary tools and transparency on that or is that just a certain ones?
[00:33:27] Speaker B: I think that, I think it's a fair question for people to ask. But also if like there's plenty of loan officers that say that I participate in the gain on sale, but if there's a loss on the hedge, then they don't hit me for that.
But I've not yet met one, seen one place that has actually showed them what the gain on what the what the gain. And when we talk about gain on sale, we're talking about the pickup over best efforts with mandatory. Right. So how much more did we as a company pick up from where you locked it to when we Sold it.
I don't know any company actually showing the math per that. I know that a lot of companies say they do and they'll give you a number, but it's, it's very, very nuanced. For example, when you take out a trade and when you pair out of something on a loan sale day, it's not one for one on the trades. You have to smooth out the P L and, and go on both sides of it. Like maybe you have a trade that was already traded out last week, but you have to carry forward some of that pair off into this week's loan sale.
So like it's, I, I look at these reports three times a week. I understand it, but how do you, you can't necessarily quantify this one loan and this one loan and this one loan. It sounds great, you're gonna make more money. But what does that mean?
Every company still has to make the money that they need to make. They need to make enough to cover all their corporate overhead and then enough to have profit on top of that. So if you're getting a pickup on the hedge, why aren't you just getting better margins to the branch or lower corporate allocation? What is your corporate allocation?
It sounds great, but nothing is free. And I can promise you a company, first of all, you shouldn't be losing money on the hedge. Now you will have pair offs where you lose money, but you gained it on the sale.
But if you're losing money on the hedge, you're not doing it right. And honestly, if you're doing it perfect, you shouldn't actually have, in my opinion, that much pickup on the hedge because you should be able to manipulate your margins better up front.
[00:35:36] Speaker A: That makes, yeah, and you actually taught me a little bit there too, so I, I appreciate that.
So that's like a good example of what, what is the hardest part about being a CEO versus a loan officer? And I think for you, you have a neat, unique piece. So you're still producing. So it's not the obvious of,
[00:35:57] Speaker F: you
[00:35:57] Speaker A: know, scared of, of losing, you know, certain business. It must be something different.
[00:36:06] Speaker B: The more transparent you like. It is a, it is a, it is a balance of transparency.
Loan officers inherently all believe you're hiding something. Every company's hiding something. What are they hiding?
And so it's this balance of if you're too transparent, that can bite you because no matter how transparent you are, the loan officer still believes that you're hiding something.
And loan officers want to negotiate, as does everybody. But if you're showing everything up front, how do you negotiate on that backside if there's nothing else to negotiate because you've, you're showing all your cards and if you're not showing all your cards, what are you hiding? And then how, why, how do you explain to a loan officer that you're. That, that you are hiding this or what you're hiding?
I, I think that it's very interesting.
To your point, we do still produce, you know, we'll do.
Lehman team will do about 300 million this year. Right. And you know, I'm part of that. And then obviously what. We'll do it at loan people.
On top of that, so many, the majority of loan officers out there don't know what to ask.
So they ask what they think. It is very similar to when you hear people say, I've heard, I've heard Sean actually say this on podcasts before, where loan officer borrowers ask, what's your rate?
And the answer is, well, I don't have a rate. Like you have a rate. We need to figure out how to get there. Right.
They don't know what else they're asking that question because they don't know what else to ask. Like that's the only thing they know.
And that's similar with loan officers.
[00:37:49] Speaker A: There.
[00:37:50] Speaker B: There's not enough education about what really goes on on the IMB level.
What happens when you have buybacks, what happens when you have non purchasable loans? You know, we have a. Fannie, we had a deal that we closed in October that hit my desk three days ago that there was an undisclosed debt. It was found Fannie founded an audit.
And so we had to pay an alternative purchase fee, which I'm not allowed to disclose, but it's not cheap. And that comes out. Well, should that hit the P L? Probably not, because that's, that's corporate. It's not like the loan officer did something wrong. But there's so much behind the scenes that loan officers don't know and they don't know what questions to ask. So when companies say things like we're going to share in the hedge or were only taking this corporate allocation, like are they really? And have them prove it to you, like it's, you know, or believe them, but you got to, I think you've got to be. Loan officers should try to educate themselves more. And for that matter, I will talk to anybody about all the workings behind any mortgage company any day of the week, because I'm doing it as a CEO of an IMB and a producing loan officer.
[00:39:02] Speaker A: So yes, if you're a listener here, you just got like some just reach out. And that's sort of the platform we have on this show is we give access to leaders like yourself. You usually only get at conferences and, and the people that need the advice the most, the loan officers, processors don't go to the conferences because either affordability or nobody wants to send them to get recruited. We always joke here. So.
But you also need it. Like I tell my vendors, you need a catalyst to reach out. So you saying that Max is. Hopefully somebody listens and takes you up on it. And so when they call you ring, ring, ring, ring and they ask you what, what do you think is the most over promised piece that you've heard from loan officers that other IMBs are or broke? I don't know.
[00:39:51] Speaker B: Other brokers imb the piano. The PNL. The PNL. You know, when you interview an employee, you're going to hire a closer or a processor, whomever. Right? You don't know what you're getting into. They, they always present their best self. You know, they've got this beautiful resume. They're all dressed up.
You know, you're, you're getting, as Chris Rock once said in one of his standups, you're not meeting them, you're meeting their representative. Right? Like, and it's the same thing when you're, when you're getting recruited by a company and they're showing you, oh, this is what your pricing is going to be and this is what your P L is going to look like. And all of those things, they don't know. They, they like, they don't know. I've seen a thousand p. Ls, ten thousand p. Ls.
You can't, when you're looking at line items and you don't have a general ledger, it's very hard to really understand. So everybody does this like, well, this is our average basis point spend on this and this is our average basis point spend on that. Because most, most P and L owners don't look at, and some don't have a general ledger. They just have this, this one Excel sheet.
And so you know, it's, it's, it's, it's, it's, it's that. It's. Just because this looks amazing doesn't necessarily mean that's what it's going to be. Now I'm not saying it's always not and that everybody's a liar, but it's certainly the most overhyped and over promised thing that I see out there.
[00:41:24] Speaker A: Yeah. And is that to.
Is did the P L become popular to satisfy the entrepreneurial aspect of a salesperson? But so they can stay being a loan officer, but they can't.
They don't really want to run a whole. They don't want to go through everything you did with warehouse lines. Is that where the, the P L became a big part of mortgage?
[00:41:47] Speaker B: You know, it used to be a big part back in the day, and then they had to go away.
I like to, I like to joke that when I started loan people and immediately said we're doing P Ls that everybody else got on board and I started the trend.
But I think really it's not, I'm sure, but it's funny. It's funny to joke about. But look, I mean as a loan officer, we all feel like we're self employed, right? We all want to be self employed. We all feel like we're self employed. I, the reason I started an IMB is because I thought I was self employed.
I commanded, I am self employed. I can take my business anywhere. Yes, yes. But the place that you're at can also change your margins and change your pay and make you do all these things and not let you expense stuff. So like when I hit that harsh reality of I'm not really self employed, that is where I started going down the path of starting my own company.
But I think loan officers are smart enough to understand that they're more than just a commission.
If I'm bringing in, if I'm bringing this in, I like, I should get a piece of it and I shouldn't just get my 100 or 125 basis points or whatever I get. Like I should participate in the profits.
At the end of the day, the dirty secret that nobody wants to say is whether you're a P L branch or not, the company behind the scenes is still making about the same amount of money.
It's just how it's being allocated. Is it being allocated as commission and profit share or is it being allocated as commission? Like at the end of the day, that's what it is. The company has to make what the company needs to make to cover cost and make a profit to survive.
So it, but it certainly feels good to say I'm sharing in profits and, and I have a say.
And like I don't Disagree with P Ls by any stretch because if I want to go spend $20,000 a month in marketing, I should be able to do that as long as the company's not losing money. And making what the company needs to make versus having to say I'm going to make this and then I've got to get permission to expense my, my stuff.
[00:43:54] Speaker A: Yeah. And I, you know when I was selling the mobile app back in 2014, I felt like a lot more companies had, and maybe this is before you started the P L trend but they, they would have money to spend on marketing and therefore they would take chances on different software. Top of fun.
Now it seems it appears as though that's more their money and so they're much tighter with that money and they end up not spending anything on marketing software that they once did and it almost forced them to do it. But it, at least they are running, you know, their own business now. And so that model seems to technically they, it gives you more opportunity to outgrow your peers because if you put gasoline on the fire, you know it will roar.
[00:44:45] Speaker B: It does. And as a, as a self employed business owner, if I want to go spend money on a realtor event or marketing or this or that, well as long as I have it in my P L to cover it then and it's compliant, you know, we're not, we're not doing non compliant things then I should be able to do that versus saying okay, well I have all these expenses. Like when I was at company number two, I had a marketing budget. I went on a P L, I had a marketing budget but then my marketing budget got changed because it was 2018 and all of a sudden they needed to be more profitable because the industry was shrinking. But I wasn't shrinking, my P L wasn't shrinking, my branch wasn't shrinking but the overall company was. And so like it's I, I get it right? Like as a, as a, as a, as a lead generating loan officer, branch manager, I like take what you're going to take and let me keep the rest and then let me decide how I'm going to spend whatever's left over.
[00:45:43] Speaker A: That's, I mean it sounds like freedom. And then you obviously have, don't have that middle layer so you're going to have more they, you know, a typical loan officer could work with.
So you know, kind of finishing up here a loan officer that is out there looking at different companies to go with. And when we do ask this a lot, it's a central theme of our show.
Why loan people? Why lone people now.
[00:46:14] Speaker B: Yeah, no, I, I appreciate that. That's a great question.
What several of our biggest advantages.
Number one, marketing, our marketing platform is second to none and anybody that's ever looked at it. Recruiters, other peers, executives. What we're doing from that perspective, nobody's doing. We've taken the marketing that built a 300 million doll Covid team and are giving that, it's now been expanded dramatically and giving that to other loan officers. Additionally, our product stack and our pricing, our pricing is lean to your point, we're very flat level.
The product stack that we do rivals all the big guys non qm. We're doing it all in house, all delegated, all the things.
Again, I don't want a broker, I want a, I want to, I want to maintain control and then I am a producing, I'm a top producing loan officer slash CEO. So I can explain and talk to number one, how do we work through this deal and how do we make this deal work. But also here's what goes on behind the scenes of secondary compliance, post closing and here's the things that we're dealing with and so you really get this well rounded transparent machine that has been proven to help many loan officers double and more their business. Our average loan officer last year increased their business 33% over the year before and quite a few of them were 100 or more.
[00:47:49] Speaker A: That's real money. And I hope our listeners appreciate hearing the story of Max Lehman and lone people. It's not just growth for the sake of growth, but a company that was built from a loan officer's originating platform operating system that he used.
The ability to understand the file, protect the customer, work towards a comfortable payment, respect the agent relationships with 10,000 friends, know the numbers, certainly know the guidelines better than anybody and build the kind of platform that can share it with you as a loan officer that you wish existed, maybe where you are today and now have the opportunity to either join Max or as he said, just reach out and form a relationship, get some advice and someday see if paths cross. Thank you, Max. Appreciate you coming on the show.
[00:48:47] Speaker B: Really appreciate you having me. Thank you so much.
[00:48:50] Speaker A: Thank you for joining us on this journey into the heart of mortgage innovation.
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